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December 10, 2013 1:49 pm
Informa plans to move its tax base back to the UK after departing for Switzerland four years ago, signalling the latest endorsement of George Osborne’s corporate tax reforms.
The FTSE 250 media group, whose brands include Lloyd’s List and Routledge, is seeking shareholder approval to move its headquarters back to London following changes to UK laws on how overseas profits are taxed.
In 2009, Informa – which does 80 per cent of its business outside Britain – shifted its tax base to Zug, Switzerland, to avoid a tightening of Britain’s rules that would have significantly increased its tax bill.
Informa’s decision to return to Britain is the latest response to a concerted effort by the Treasury to shore up the UK’s reputation as an attractive location for multinationals.
It marks a reversal of the trend that started five years ago when 22 big companies, including WPP, Shire, Regus, Henderson and UBM, moved their tax base out of the UK, blaming the Treasury’s drive to tighten anti-avoidance rules on foreign profits.
Tax advisers say that up to 60 multinationals are now planning to relocate their global and regional headquarters to the UK, in a big increase from a year ago. EY, the professional services firm, said the UK could expect more than £1bn of additional tax revenues if all the potential transactions were completed.
In last week’s Autumn Statement, Mr Osborne, the chancellor, highlighted a study by KPMG, the professional services firm, which found, for the second year running, that the UK was viewed as multinationals’ most attractive corporate tax regime, although its lead over rivals such as Ireland, Luxembourg and Switzerland had narrowed.
In 2009, when Informa announced plans to move its head office to Zug it said Switzerland would offer “a less complex taxation system which offers upfront certainty of treatment and does not seek to impose tax on the unremitted profits of subsidiary companies in other jurisdictions”.
But advisers say the UK is now often seen as more attractive than Switzerland after a series of tax reforms aimed at making Britain “open for business”. The Treasury has sharply cut the corporate tax rate, introduced a reduced tax rate for patent income and reformed the tax rules on foreign profits so companies pay just over 5 per cent on finance income earned in low tax countries
Informa said it would hold an extraordinary general meeting about the plan to move its tax base back to the UK in the second quarter of 2014.
“We anticipate no material change in reported tax rates or taxation paid as a result of the change in domicile,” the company said.
Separately on Tuesday, Informa announced the appointment of three independent non-executive directors to join the company’s board from January 2014. They are Gareth Bullock, a former executive at Standard Chartered; Geoffrey Cooper, the chief executive of Travis Perkins, the builders’ merchant; and Helen Owers, a former executive at Thomson Reuters, the media group.
The appointments come at a pivotal time for Informa as Peter Rigby, the group’s chief executive since 1988, is due to step down in January. He will be replaced by Stephen Carter, a non-executive board director and former head of Ofcom, the telecoms regulator.
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